Minimum wage increase sparks debate

Keila Torres Ocasio

Published 10:28 pm, Thursday, May 30, 2013

Even though he pays his employees higher than the minimum wage, Scott Basso, owner of Steve Basso Plumbing, Heating, and A/C in Bridgeport, Conn., thinks raising the wage will lead to higher supply costs.
Photo: Brian A. Pounds

Only a small fraction of the state's labor force will be affected by the approved increase in minimum wage, but the debate the increase provokes is outsized. Those for and against the change say it will have long-standing effects on the state's economy.

More than 106,000 of Connecticut's lowest-earning workers will benefit from the increase, which gained final passage by the General Assembly this week, and is expected to be signed into law by Gov. Dannel P. Malloy.

Even though he already pays his employees more than the minimum, Scott Basso, owner of a plumbing and heating business in Bridgeport, said his business costs will be affected by the legislature's decision to increase the lowest salary allowed from $8.25 to $9 an hour by January 2015.

"Any change to the minimum wage creates inflationary pressure at every wage group," Basso said. "I don't employ anyone at minimum wage but I will have to increase my wages because of the skill level. The earnings difference needs to remain."

A domino effect may cause him to increase his fees, if the companies he purchases his equipment from increase their prices in order to pay the new required wage. It's an issue Joe Filc, owner of Villarina's Pasta and Fine Foods in Danbury, has considered, but not one that will stop him from hiring new employees if needed.

Filc moved his business, which produces gourmet pasta and prepared foods for the wholesale market, from Westchester to Danbury last year as part of an effort to reduce his overhead and expand his operations.

"Relative to Westchester it's still a lot cheaper running a business in Connecticut, even with the minimum wage increase," he said.

Andrew Markowski, of the National Federation of Independent Business, said the state will lose its ability to compete if it continues to force additional costs upon small businesses. The minimum wage bill follows other increases, including the state's decision to mandate paid sick leave for many businesses, he said.

One thing legislators did not do, however, was keep an original proposal within the bill that would have automatically adjusted the state minimum wage for inflation.

"That would just be a never-ending increase in costs to employers," Markowski said, adding that the 75 cent hike amounts to a 9 percent increase and does not include increases in associated costs, like payroll taxes and worker's compensation. "Small businesses continue suffering and this isn't helping."

But it will help struggling low-wage workers, labor groups argue.

"By boosting pay in the low-wage jobs so many working families rely on, we are really boosting the consumer spending that powers our economy and that local businesses need in order to grow," said Kurt Westby, vice president and state director of the SEIU 32BJ, a labor union that represents 4,500 property service workers in the state.

In Stamford and Greenwich, business owners were split on whether the minimum wage hike is a good or bad thing -- or whether it even matters.

"It's not going to have much impact because of where we live," said Jack Condlin, president and CEO of the Stamford Chamber of Commerce. Citing the region's high cost of living, he said many businesses already pay junior employees more than $9 an hour.

Indeed, a stroll through Old Greenwich's upscale business district confirmed the point.

"Nine dollars an hour? No one will work for that around here," said Gary Kelley, 50, standing behind the counter of the German-themed deli Alpen Pantry that he's owned for 28 years. "I usually start people at $10 an hour."

On Sound Beach Avenue, Marcos Torno, who owns the art gallery and framing store Images, said that in 23 years he's never even considered paying someone minimum wage.

"They won't come to work for (that)," he said, pointing out one of his four employees.

Taking a bird's eye view of the matter, Scott Weiner, a partner in the cleaning and restoration company Steamatic of Connecticut and New York, said he thinks the wage hike will ultimately benefit both the state and business communities.

Weiner, who also chairs the Greenwich Chamber of Commerce, said Steamatic doesn't pay any workers minimum wage. But he hopes that people who do see pay increases because of the legislation will be more inclined to hire his company and boost the overall economy.

"I think it'll be a win for both sides," he said.

The effects of the bill would have been more widespread had it not been for the removal of language that would have impacted restaurant servers and hotel workers, said Nicole Griffin, executive director of the Connecticut Restaurant Association.

Those workers will continue to make $5.69 an hour under a percentage reduction in the legislation that estimates their income from tips.

"It's just something a lot of restaurants couldn't handle right now," Griffin said.

State Rep. David Rutigliano, R-Trumbull, who owns the Southport Brewing Company, said he was certainly relieved that restaurant servers weren't affected by the legislation but he said the legislation could still negatively impact the state's economy.

He said most minimum wage workers serve in entry-level positions and are young adults and teens, who already have a higher unemployment rate than adults throughout the nation.

"My fear is that this will make these jobs so expensive that they'll go away," Rutigliano said. "These jobs are minimum wage for a reason. They're low-skill, entry-level jobs. They give young people valuable job experience."